Nigerian fuel price protests grow on second day

LAGOS/KANO (Reuters) - Nigerians took to the streets on Tuesday in growing numbers on the second day of protests against a sharp increase in petrol prices, piling pressure on President Goodluck Jonathan to reverse his removal of fuel subsidies.

Africa's biggest oil producer on January 1 scrapped subsidies on imports of motor fuel, which many citizens see as their only welfare benefit, more than doubling the price of petrol to about 150 naira a litre.

Tens of thousands demonstrated in cities across Africa's most populous nation. Tuesday's protests were bigger than on Monday in Nigeria's largest city Lagos and in the capital Abuja and were on par with the previous day in other major cities.

But Jonathan's resolve in the face of the kind of protests that have derailed past attempts to scrap the fuel subsidy showed no sign of weakening.

"The strike is the first true test in policy terms of the Jonathan presidency. They chose the issue and the timing," said Antony Goldman, Nigeria specialist and head of London-based PM Consulting.

"If they prevail, the prospects for reform in other delicate areas - the constitution, oil and gas, revenue - all improve. If the strikers prevail, the administration's credibility is massively damaged. If oil exports are not hit, the government will hope the thing just peters out."

In Rivers state, in the oil rich Niger Delta, the local government said it would cap the price of fuel in the state at 137 naira per litre. Although this is more than double the subsidised price it is the first sign of local government compromising on the free market message pushed by Jonathan.

Thousands gathered outside the labour union headquarters in Lagos and marched to the marina that runs along its wide lagoon. The roads of the normally heaving commercial hub, notorious for its traffic jams, were largely empty.

Oil workers were also on strike and the offices of international companies such as Shell and Exxon Mobil were shut. But Shell and the state oil company said output was unaffected.

BURNING TYRES

A group of youths set up a road block of burning tyres on the main bridge over the lagoon connecting Lagos's two islands to the mainland, shouting at cars to turn back. "The betrayers in government must free us from slavery," one placard read.

Police fired live rounds into the air to disperse a crowd in the middle-class suburb of Lekki, but most protests, many guarded by riot police, were peaceful.

The violence has so far been limited by Nigerian standards.

On Monday the police shot dead two people in the northern city of Kano who were helping to pull down the walls around Government House, the seat of the state governor, according to witnesses and hospital staff.

The police said one person had been killed in that incident.

Police spokesman Yemi Ajayi said a policeman who shot dead a protester in Lagos on Monday had been arrested:

"If he is culpable, he will be charged. It could be (murder), but that depends on what the investigation discovers."

Some independent market stalls and shops were open in many cities but banks, government offices and large company buildings remained closed. Some flights into Nigeria were cancelled.

But a spokesman for Shell Nigeria said there was "no impact on (oil) production at this time".

Much of Nigeria's oil comes from offshore fields that rely on small numbers of staff and heavily automated equipment.

Most of Nigeria's 160 million inhabitants are furious with the decision to scrap the subsidy, and many protesters said they would stay on strike until it was reversed.

"If we have to starve to make the president reverse his decision, I will do it," said Musa Abdullahi, a 43-year-old iron worker in Kano.

"This strike is about every Nigerian and the future of our nation. Every government has told us that more money on petrol will better our lives in the long term, but nothing changes."

Saun and Femi Kuti, musicians and sons of the late Afrobeat legend Fela Kuti, led one of the biggest rallies in Lagos, gaining vocal support from adoring fans in the crowd.

But economists say the subsidy is wasteful and corrupt, sending billions of dollars intended for the poor to a cartel of petrol importers, and encouraging smuggling into neighbouring Benin and Cameroon, where fuel is more expensive.

The government estimates it will save 1 trillion naira this year by eliminating the subsidy, and the government is keen to use this money to win public support.

Finance Minister Ngozi Okonjo-Iweala said 90 billion naira a year of the saved money would go on roads and infrastructure, 57 billion on rail and 60 billion on poverty safety nets.

Pro-government adverts reading "Nigerians, let us remember that this is the first administration that has delivered on most of its promises" were on the front page of several newspapers.

Jonathan has also pledged to cut the salaries of his administration by 25 percent.

But to most Nigerians, such gestures and promises feel tired and empty. Although many politicians have grown rich from a sector that exports $200 million of oil a day, decades of corruption have left power and transport networks and education and healthcare badly neglected and dilapidated.

Jonathan is already under fire from critics for not reining in almost daily attacks by a radical Islamist sect in the mostly Muslim north, which has claimed responsibility forbombings and shootings that have killed hundreds in the last year.

The police said suspected members of Boko Haram on Monday evening assassinated a member of the state security service and shot dead two other people, in separate incidents.